The country’s top court has brought back to life penalties earlier imposed on the Kerala Film Exhibitors Federation (KFEF) and its key office-bearers for anti-competitive practices, undoing a 2016 tribunal ruling that had given them relief.
A Bench of Justices Manoj Misra and KV Viswanathan made it clear that the Competition Commission of India (CCI) was right in levying fines without the need for issuing a second show-cause notice. According to the judges, the Federation and its office holders had enough notice of the charges and couldn’t plead ignorance or prejudice.
The controversy traces back to Kozhikode’s Crown Theatre, which accused the Federation of threatening film distributors that their movies would be blocked across theatres if released at Crown. The Federation allegedly went as far as calling for a boycott of films at the venue, forcing Crown Theatre to walk away from Federation membership.
The CCI’s investigation unearthed direct involvement of Federation leaders—President PV Basheer Ahamed and General Secretary MC Bobby. Evidence showed that the Tamil film Raja Rani was pulled from Crown Theatre within three days, on Ahamed’s instructions, a move cited as proof of coercion.
In 2015, the CCI ordered penalties: 10% of average income to be paid by the Federation and the two leaders, a two-year break for Ahamed and Bobby from Federation duties, and compulsory competition awareness programmes for members.
While the now-defunct Competition Appellate Tribunal upheld the violation, it had struck down penalties on the office-bearers citing lack of a separate penalty notice. The Supreme Court has now overturned that view, stressing that under Section 48 of the Competition Act, individuals in charge are automatically liable for violations.
The Bench noted that the law, before its 2023 amendments, envisioned a single round of notice and hearing—no more. With that, the penalties stand restored, reaffirming the accountability of both organisations and individuals for anti-competitive behaviour.